Germany's Scholz makes difficult visit to assertive China

Chancellor Olaf Scholz is making his first visit to China as German leader this week, a diplomatically delicate trip while Germany and the European Union work on their strategy toward an increasingly assertive and authoritarian Beijing.

Scholz's messages will face close scrutiny. While his nearly year-old government has signaled a departure from predecessor Angela Merkel's firmly trade-first approach, he is taking a business delegation and his trip follows domestic discord over a Chinese shipping company's investment in a German container terminal.

The leader of Europe's biggest economy will meet President Xi Jinping and Premier Li Keqiang during Friday's one-day visit. With China still imposing tough COVID-19 restrictions, his delegation won't stay in Beijing overnight.

Scholz's visit, the first recently by a major EU leader, comes just after Xi was named to a third term as head of the ruling Communist Party and promoted allies who support his vision of tighter control over society and the economy. It is also accompanied by rising tensions over Taiwan and follows a U.N. report that said Chinese human rights violations against Uyghurs and other ethnic groups may amount to “crimes against humanity.”

A senior German official, who briefed reporters on condition of anonymity in line with department rules, characterized the visit as “an exploratory trip” to find out “where China stands, where China is going and what forms of cooperation are possible with this specific China in the current global situation.”

The official pointed to China's “particular responsibility” as an ally of Russia to help end the war in Ukraine and press Moscow to tone down its nuclear rhetoric; to concerns over tensions in Taiwan and the broader region; to Germany's desire for a “level playing field” in economic relations; and to Scholz's current status as this year's chair of the Group of Seven industrial powers.

Even as political relations have grown tenser, business ties have flourished. China was Germany's biggest trading partner in 2021 for the sixth consecutive year, its biggest single source of imports and its No. 2 export destination after the U.S.

Scholz's government has sought to balance those ties with recognition that China is increasingly a competitor and “systemic rival,” as well as a partner on issues such as climate change. His three-party coalition has pledged to draw up a “comprehensive China strategy."

That is still pending. But Russia's war in Ukraine is concentrating minds as Germany grapples with the fallout of having depended on Russia for over half its natural gas supplies. This year, Germany has scrambled to end that dependence, while Russia eventually shut off supplies.

Foreign Minister Annalena Baerbock said Sunday that she fears “that a mistake Germany made in recent years with Russia could be repeated.” And, she told ARD television, “we must prevent that.”

Baerbock's comments came after the government argued over whether to allow China's COSCO to take a 35% stake in a container terminal at the Hamburg port. Baerbock and others in two junior coalition parties opposed the deal while Scholz downplayed its significance. In a compromise, COSCO was cleared to take a stake below 25%, above which an investor can block a company's decisions.

Scholz has appeared to tread a middle path on China. Unlike his two immediate predecessors, he made Japan rather than China his first Asian destination. He is encouraging companies to diversify, but isn't discouraging business with China.

After an EU summit last month, he said: “No one is saying that we have to get out of there, we can’t export there any more, we can’t invest there and we can’t import from China any more.”

But, in an increasingly multipolar world, ”we shouldn’t concentrate on just a few countries,” he said, adding that “not putting all your eggs in one basket" is wise.

At the same summit, leaders of the 27-nation EU discussed reducing their dependence on China for technology equipment and raw minerals, and agreed to demand a better balance of economic relations while working with Beijing on global issues.

Scholz said in an article for the Frankfurter Allgemeine Zeitung newspaper that he's traveling “as a European,” and Berlin consulted closely with European and trans-Atlantic partners before the visit. He said “Germany's China policy can only be successful if embedded in a European China policy.”

Chinese Foreign Ministry spokesperson Zhao Lijian said Tuesday that Beijing believes Scholz's visit “will inject new impetus” into the development of the “comprehensive strategic partnership” between the two countries "and contribute to world peace, stability and growth.”

“Current Sino-German relations can be characterized as ‘cold politically and hot economically,’” said Ding Chun, director of the Center for European Studies of China's Fudan University, using a formulation often used to describe Beijing's relations with Japan. But Ding said the visit will help promote bilateral relations by showing support for economic ties and multilateralism in the face of calls for “decoupling.”

In Germany, many are warier.

Scholz should warn China against substantial support for Russia in the Ukraine war, make clear to its leaders that Germany is committed to EU unity toward Beijing, and to German managers the extent of the geopolitical risks they might face, said Guntram Wolff, the director of the German Council on Foreign Relations think tank.

Some recent decisions “looked more as though they want to take up the Merkel tradition, in which people thought they could bring about change through trade and so on,” he said.

The head of Germany’s domestic intelligence agency, Thomas Haldenwang, recently made a comparison with the turmoil over the Ukraine war, saying that “Russia is the storm, China is climate change.”

Some human rights groups have urged Scholz to cancel the trip, but German officials argue that they won't achieve anything if they don't attempt dialogue.